Higher unemployment, but with a silver lining

Unemployment in May rose by an annual 6.2 percent to 6,698 persons, confirming that the economy is not performing as well as it did last year.  However, the monthly trend is positive, as the number of jobless in May was 1.1 percent lower than in April and 3.9 percent lower than in March.

It is probably this that prompted the Minister of Finance Tonio Fenech to claim, at a breakfast meeting earlier this week when he launched the pre-Budget Document, that economic reality is “different “ from what the GDP figures show.   But analysts say that it is not that reality is different, but that the economy is sending mixed signals.

The GDP retrenchment is real enough, though it is likely to be short-lived.  On the other hand, employment does not appear to have been unduly badly hit by the recession.  Whilst certain sectors continue to generate new employment, those that have been suffering the effects of the recession have generally tended to hold on to their employees in the expectation of better times.

The majority of the unemployed (41%) are those aged 45 and over.  Another 30 percent come from the 30-44 years age bracket.  A full three-quarters of the increase in the jobless count was amongst those aged 45 and over.   The rest of the increase was spread over the other age categories.

Unemployment seems to have two main facets.  On the one hand, 42 percent of the jobless have only been registering for work under 21 weeks.  On the other hand, 38 percent of the jobless have been looking for work for over a year.  This means that many of those who lose their jobs are not finding it awfully difficult to find new employment, but also that there is a hard core of unemployed who, once on the dole, find it challenging to get alternative employment.

Labour market analysts say that the Employment and Training Corporation should develop special programmes for those who have been on the unemployment register for a longish period of time, emphasising  practical skills.  Special attention should also be paid to two particular classes of the jobless who seem to be particularly at risk, namely clerks and service workers, who accout for almost 38 percent of the unemployed.

The NSO also released the unemployment rate for December 2011, which remained stuck at 4.2 percent of the workforce, though slightly lower than in the previous year.  The long-term unemployment rate also remained stationary at 1.5 percent.